US regional retailer Bi-Lo is to acquire local peer Winn-Dixie Stores, in a deal that will create a company operating 690 stores across eight states.

Bi-Lo has tabled a bid worth US$9.50 a share for Winn-Dixie, which has recommended the offer to its shareholders. Winn-Dixie said the bid was a 75% premium on the price at which its shares closed on Friday.

Bi-Lo chairman Randall Onstead said the retailer was "very excited" about the deal. It operates 207 supermarkets across four US states; Winn-Dixie has around 480 outlets in five states but Onstead said there was "no overlap" between the two retailers' operations.

"The combined company will have a perfect geographic fit that will create a stronger platform from which to provide our customers great products at a great value, while continuing to offer exceptional service," Onstead said today (19 December).

In August, Winn-Dixie reported annual losses of over $70m and a fall in sales. Chairman, CEO and president Peter Lynch said the deal was "in the best interest of our shareholders". He added the combination of Bi-Lo and Winn-Dixie would build a company "that is stronger than our individual businesses". Both banners will remain in place after the deal goes through.

The acquisition is subject to the approval of Winn-Dixe shareholders but is expected to close within the next four months.